Innovation at PNC. Brian Halloran Vice President PNC Treasury Management

Transcription

1 Innovation at PNC Brian Halloran Vice President PNC Treasury Management

2 Today s Discussion Why Innovate? Types of Innovation Financial Services Industry Wide Innovation at PNC PNC Virtual Wallet Journey Healthcare Advantage

3 Innovation Provides Additional Options for Organic Growth Growth Organic Growth Growth by Acquisition Growth within proven business definitions Strategic Innovation (test viability of new business models) Maintain or expand share In growing markets (continuous improvement) Capture Larger Share Of Mature Markets (through product or process innovation) Source: 10 Rules for Strategic Innovators, Govindarajan and Trimble

4 Innovation Provides Additional Options for Organic Growth Benefits of Innovation Additional tactic for accelerated organic growth Differentiated positioning to support brand in the market Strategic, first-mover advantage when IP protected Positive impact on attracting/retaining employees Risks of Not Innovating Assumes current strategy, products and processes are sufficient to win Continuously playing catch up with competitors (as they innovate) Brand position may be weakened

5 Acceleration in the Development of Winning Innovations in Financial Services in the Last Decade ezycash Ubiquitous credit cards Private bank model propagated across USA ETF s P-to-P payments Keep the change ATMs SMA/UMA One Account High-yield online savings account SMS text alerts Source: Annual Innovation Convergence Conferences May and October Council on Financial Competition, Financial Innovation Around the World, 2006.

6 Innovation leverages one or more of the 5 Degrees of Freedom to achieve breakthrough growth Overall Goal of Innovation Breakthroughs in: Customer AGR Operations efficiency Business model, etc. Innovate Along One of The 5 Degrees of Freedom Product, service innovation Channel/ service delivery innovation Geographic expansion Modify industry structure Step-out into new competitive arenas Leverage Enablers of Innovation Technology Operations/business processes Execution Branding/marketing Developing people (manager-entrepreneur)

7 Across the entire retail value chain, there has been significant, recent innovation and reinvention Product Design Marketing / Targeting Channels Fulfillment Service / Collections Customer insight based approaches resulting in new innovations in the market place, e.g., BofA keep the chance, PNC Virtual Wallet Improved data mining, behavioral segmentation and trigger based marketing vastly improving targeting and message design / delivery Changes in customer behavior (e.g., TiVo, social networking, micro blogging, etc.) creating new opportunities in channel design Vastly improved risk modeling techniques, and lean back office models improving underwriting / fulfillment quality and cycle time Improved self service and automated channels reduce cost and increase customer delight

8 pncvirtualwallet.com Built for Gen Y segment Banking service Based upon ethnographic research US and global Different business model Marketing Web 2.0 Distribution Product Pricing Brand

9 The Offer Online Banking Built for Gen Y Hi-Definition view of finances Calendar Money Bar Wish List Savings Engine Mobile banking An Integrated Payment Account Spend, Reserve, Growth New balance elements Easy setup comes with Free PNC ATMs High yield savings account

10 Virtual Wallet Customer Experience

11 Other Examples PNC Healthcare Advantage Business problem: Inefficient Healthcare Revenue Cycle Highly manual, paper-based Excessive rework / waste /Lost claims / lost revenue High days sales outstanding (DSOs) and high levels of bad-debt Cross-functional team Executive support All aspects of PNC involved Outside partnership Building off our core into areas unfamiliar to PNC and most banks

12 Innovation Made Easy Business Model Product & Pricing Process Continuous Improvement Start with a business problem Have top-down commitment and involvement Commit to a process and culture Immerse yourself in the customer s world Do not limit your thinking to how you currently make money Involve people who know nothing about your business Have a tolerance for failure Be willing to cannibalize your existing business It s hard to make it easy

13 Questions? Brian Halloran Vice President PNC Treasury Management